Telematics: Connecting the car to the home

As auto manufacturers try to leverage economies of scale, they are increasingly building telematics into more and more fleets of cars. For telematics companies, production cycles are becoming shorter and shorter, meaning there is a steadier stream of products with many more options. QNX, for example, shipped telematics to 20 million cars over the past decade, but head of Automotive Business Development Andrew Poliak expects to ship between six and eight million in 2011 alone. Most are operating systems like GM’s MyLink and Toyota’s Entune that help OEMs stay in touch with drivers after the sale. Down the road, this will help generate revenue through app sales.

Now, manufacturers can provide remote support for application and software updates. It costs, on average, $35 each time a driver visits a dealership for a software or electronic recall. “If you can update or enhance the vehicle post-production and keep them from having to come in, that’s a pretty significant cost savings,” Poliak says.

So is telematics starting to win over consumers’ hearts and minds, and will it eventually win over their wallets, too? That depends on how well telematics can connect the car environment to the home environment.

What consumers want

At Ford, 41% of customers say that SYNC is critical or important; a little less than 50% of customers say telematics plays an important role in their vehicle choice. And once drivers have the technology in their cockpit, they’re using it. Almost 80% use voice commands, according to Michelle Moody, Ford’s cross vehicle marketing manager. When it comes to individual telematics components, hands-free phones are ranked number one, emergency assistance comes second, turn-by-turn navigation is third.

Music connectivity, such as iPod syncing and USB connections, are also popular. Consumers’ positive responses have led to a doubling in year-over-year sales for SYNC-equipped vehicles, according Moody. In 2010, Ford sold one million SYNC-equipped cars; the company has sold three million vehicles equipped with SYNC since 2007.

Ford dealers demonstrate the SYNC features during test drives and are finding the most positive reactions to safety features, such as voice-activated phones, 911 Assist, and turn-by-turn directions, according to Alan Hall, Ford’s communications manager. Eight American states—California, Connecticut, Delaware, Maryland, New Jersey, New York, Oregon and Washington DC—prohibit drivers from using cell phones while driving. Ford stocks only SYNC-equipped vehicles in these states.

This year, Ford launched AppLink to its Fiesta line of vehicles. AppLink brings voice controls to BlackBerry and Android phones as well as to music applications like Pandora and the OpenBeak Twitter app. Poliak expects a car-to-home connectivity breakthrough to come when plug-in electric vehicles start to communicate with other power sources in the house; for instance, warming up the car and checking on the battery charge from the television. (For more on EV infrastructure, see ‘Telematics and smart grids: The business opportunity’.) “That’s where I think that will be more interesting,” he says.

Greg T. Spielberg is a regular contributor to TU.

For all the latest telematics trends, join the sector’s thought leaders at Telematics Detroit 2011 in Novi, MI on June 8 and 9.